Essay on Service Management

Centralization vs decentralization is one of the main questions concerning organizational control and effectiveness of service providers.  The main difference between centralized and decentralized service providers is the division of work and grouping of activities. Some trade-offs prefer to use decentralization which allows delegation of authority. Many service providers prefer to follow a decentralized strategy which help them to low support costs.

Help with Essay on Service Management
Help with Essay on Service Management

Most of such providers propose personalized services (for instance, software vendor, logistic service providers). Decentralization is closely related to delegation of authority, but it includes all areas of management and requires a great deal more than handing authority to subordinates. In contrast many large companies (for instance in hosting and application management services) tends to centralization strategy. The advantage of centralized strategy is that it is easy to control all activities and implement a general and unified policy. For most of them, it is more cost effective and cost saving.

“In terms of cost-effectiveness, the 10 percent/$10 million conversion differential was met in all trade-offs competitions involving the conversion of work to private sector performance” (Report on the Use, 2006). For small service providers, the advantage of decentralized strategy is delegation of authority and autonomy of actions and decisions. The disadvantage is the narrowness of outlook inherent in functions and standards set cannot easily be linked to objectives of the business. In practice, the combination of the two occurs. Cost remains a significant factor in al trade offs decisions” (Report on the Use, 2006). For example, sales are often the first functions to be decentralized and finance and human resources the last but still it gives small service providers the greatest overall benefit. Some trade offs must be taken locally and management must decide what are vital decisions and keep these, then delegate the rest (Schmaedick 1993).

References

  1. Schmaedick, G.L. Cost-Effectiveness in the Nonprofit Sector: Methods and Examples from Leading Organization. Quorum Books, 1993.
  2. Report on the Use of Best Value Tradeoffs in Public-Private Competitions. 2006. http://216.239.59.104/search?q=cache:I9kokfjzpw4J:www.whitehouse.gov/omb/procurement/comp_src/cs_best_value_report_2006.pdf+cost+tradeoff+service+provider&hl=ru&gl=ua&ct=clnk&cd=3

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